Less customers are buying CFL bulbs than expected, despite tax incentives that total nearly 3 dollars per bulb, cutting the price to one third the standard MSRP. (Source: Walmart Corporate)

State government concludes that it will not realize the savings it expected

It was
all flowers and roses when the state of California launched its $548M USD
program to help promote consumer use of compact fluorescent lamps. Manufacturers
and utilities were onboard because they received bonus pay to enact rebate
programs. Citizens were happy as they received cheap CFL bulbs, which
promised to save them money on power expenses. And the
politicians were happy, as they looked sufficiently "green" to
satisfy the eco-minded voters.

Now that utopian vision of futuristic lighting has dissolved into rancor
and disappointment. A multi-million dollar program by the
state designed to evaluate the actual results has concluded that energy savings
were not as good as expected and that utilities were being over-rewarded for
their performance.

At the heart of the problems is the fact that utility provider Pacific Gas
& Electricity Corp (PG&E) has forced to cut estimates of CFL life
average lifetimes from 9.3 years in 2006 to 6.3 years. The
shorter-than-expected lifetime was due largely to people turning CFL lights on
and off, and the fact that CFL bulbs were often put in disadvantageous locations
like bathrooms or recessed lighting.

The state studies say that the shorter lifetimes led to the utility missing its
proposed energy cuts. PG&E disagrees, claiming it narrowly made the
targets. Now state regulators are left to argue whether to award the
utility its expected bonus pay.

Another thing working against PG&E is that, despite its up-front investment
of $92M USD for a CFL rebate program, fewer bulbs were sold, fewer were screwed
in, and they saved less energy than PG&E anticipated. While
Californians only pay $1.30 for the subsidized bulbs versus $4 in states where
they were not subsidized, the citizens didn't all seem interested in jumping on
board and moving away from traditional incandescent lighting.

One headache for utilities is that they are only rewarded for the energy saved
by customers who, when surveyed, say they would not have otherwise purchased
the bulbs.

Still, for all PG&E's complaining, it did receive $104M USD from two rounds
of funding ($143.7M USD initially, and $68M USD in December 2010) -- more than
its rebate program, which it has not even completed.

The California government is now considering switching from rewarding utilities
based on energy savings, to rewarding them based on the amount of adoption.
Many, including some utilities, argue that the switch would simplify the
accounting process for everyone and reduce the penalties for cooperating
utilities if, outside their control, the products fail to deliver the expected
savings.

The aftermath of the California CFL mess is perhaps, just a sign of things to
come. California, the leading state in promoting CFLs, began phasing out
incandescent light bulbs on January 1. Next year the rest of the nation will follow. By 2014,
incandescent light bulbs will be gone from shelves, for better or worse.

The transition is a win for one party, at least -- China. Chinese
manufacturers produced the vast majority of the 100 million CFLs installed in
California since 2006.

Worldwide, many nations, rich and poor are also eyeing major CFL campaigns.
The World Bank, as part of its charitable efforts, donated away five
million CFL light bulbs in Bangladesh in one day alone. Its also giving
away CFL bulbs in many other nations in an effort to make lighting more
affordable in impoverished nations.